There's a rumble goin' on

11 March 2018

We’re in for a confrontation - I’m betting on a stagey bust-up
between the two negotiating sides. This would forestall the revocation sought
by diehard Remainers, though their ploy can’t be altogether dismissed. To focus
on the most likely, four developments point to a rumpus: the aftermath of the
Cabinet speeches, HMG’s apparent new backbone, the prospect of a fiscal windfall,
and Hurricane Trump.

-o-

The round
of speechesMay’sMansion
House addresswas comparable to her earlier pronouncements. She confirmed
that the UK is to leave both the single market and the customs union. She also
confirmed that she seeks special arrangements for certain industrial sectors,
in particular financial services as subsequently amplified
by Hammond. Her forthright rejection of a customs union left Corbyn looking
weak and helped rally the Tories - at least for a few days.Donald
Tusk immediately trashedBritain for sticking to “pick-and-mix”, later
issuing menaces about Ireland. This is hard to see as improving the climate.

…the
UK believes that [provisional] arrangements are contingent on the future
relationship…and istherefore only prepared to engage
substantively (my
emphasis) on these technical issues on the basis that any discussion on
separation issues is without prejudice to the future relationship…

Such tough language from the UK - if only on procedure - breaks new
ground. The sense of a new wind in HMG’s sails is reinforced by coincident
changes of tune by a couple of senior Remain columnists. It’s reasonable to trace
this to a single cause: official sources are upping their game.

Gideon Rachman is the chief foreign
affairs columnist for the FT,
formerly Brussels correspondent for the Economist.
Till now, he has been foursquare with both titles as afervent
Remainer.On 5 March, under the headline Europe’s strategic choices on Brexit, he wrote:

It
is clearly true that the EU is a legal order. But it is also a political organisation.
The EU is perfectly capable of creating new laws — or interpreting current ones
with extreme flexibility — when it is politically necessary.

The next day saw similar signals from
Daniel Finkelstein, associate editor of the white Times. He was formerly an aide to John Major, who called
Eurosceptics “bastards”; and William Hague, who also campaigned for Remain,
which Finkelstein himselfsupported lustily. On 6
March, under the headline Brussels should
start listening to voters, he wrote:

Britain,
one of the EU’s most powerful members, has opted to leave. At what point does
the EU stop to consider whether…this might possibly be a reflection on the way
it works…whether its insistence that political integration comes before
everything might not be so wise?

Columnists speak for themselves, but it’s no stretch to detect Government
machinery gearing up handily, stiffening official language and rolling out
“talking points” to win over opinion-formers.

Windfall
to war-chestIt
seems that Hammond’s Spring Statement will deliver good news. The figures are
unclear: is it £6bn of unexpected receipts in the last year, or higher growth
forecasts delivering £15bn next year? Either will be welcome. Then for the
customary tussle about the division of the spoils - tax reductions or spending
money.

Or they could fund a Brexit war-chest, for Channel and North Sea logistics
and high-tech borders in Ulster; or for bilateral subsidies to EU member-states
taking a Brexit hit, in return for help on negotiations. Examples include
payments to Spain to finance healthcare for Costa expats; or to Poland and other
Eastern Europeans to taper the loss of welfare payments to dependents once the
full acquis lapses.

The Trump
carve-outPresident
Trump hasordered
punitive tariffson steel and aluminium imports into the US.
He has conceded a “carve-out”, ie, exemption, for his “friends”, Canada and
Mexico. Liam Fox is in Washington next week to ask for similar treatment for
the UK. It is beyond me to divine what the Trump administration might do, but
he has made much of his affection for this country and the Brexit project. If
he grants a carve-out to the UK but not the EU27, the latter will go hopping
mad, not least complaining that the UK has violated “sincere co-operation”.
No-one can say how this plays out but it cannot make for harmony.

-o-

Conclusion:
rumble in prospectThe
Cabinet speeches advanced matters little; HMG is communicating grit; May has a
potential war-chest; and transatlantic trade-wars raise temperatures all round.
I see both sides headed for a bust-up: initially some complicitous theatre
intended to shift negotiating positions, but risking loss of control if
attitudes harden further.

Attitudes already hardening combine with the Tories’ rally to hamper
the derailment sought by Remain diehards. Revocation relied upon a far-fetched
agenda of Court action, coupled with a heady brew of principled defiance from
two or three Tories and a disciplined acceptance by Labour MPs of the opportunistic
manoeuvres of their shifty leadership. I can’t see it, but I’ve been wrong
before. Either way, I sense an almighty row in the wind.

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